GBPAUD is trending higher as it moves above a rising trend line on its 1-hour time frame. Price is in the middle of a correction, though, but it looks like the uptrend could resume from here.

The pair is testing the 61.8% Fibonacci retracement on the latest rally, and this level lines up with the 1.9400 handle and rising trend line support. If it holds, GBPAUD could recover to the swing high around the 1.9750 minor psychological mark or higher.

The 100 SMA is still above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. However, price is already below the 100 SMA dynamic inflection point as an early indicator of bearish pressure. The gap between the moving averages is still wide enough, though, so there seems to be no imminent bearish crossover.

Stochastic has been indicating oversold conditions for quite some time, which means that sellers could use a break and let buyers take over. Once the oscillator starts pulling up from the oversold region, more buyers could return and allow the rally to resume.

Sterling erased most of its post-BOE gains as traders turned their focus to Brexit-related trade negotiations. PM Johnson still seems to be struggling to strike a deal with the EU, which makes things even more challenging now that the UK is already out of the union after all.

However, the Aussie could still be on much weaker footing as risk aversion has extended its stay in the markets on account of the worsening coronavirus outbreak. Although the RBA decision could lead to some bullish moves as the central bank is expected to stand pat, profit-taking might be the reaction to the event since the impact has been priced in already.